2012 Economic Calendar
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Productivity and Costs  
Released On 3/7/2012 8:30:00 AM For Q4(r):2011
PriorConsensusConsensus RangeActual
Nonfarm productivity - Q/Q change - SAAR0.7 %0.9 %0.7 % to 1.5 %0.9 %
Unit labor costs - Q/Q change - SAAR1.2 %1.2 %1.0 % to 2.8 %2.8 %

Highlights
Productivity growth for the fourth quarter was bumped up slightly and in line with the recent upward revision to GDP. Nonfarm business productivity gained an annualized 0.9 percent in the fourth quarter, compared to the initial estimate of 0.7 percent and compared to 1.8 percent in the previous quarter (previously 1.9 percent). The market median forecast was for 0.9 percent for the latest period. Unit labor costs were revised up notably to an annualized 2.8 percent increase versus the initial figure of 1.2 percent, and following a 3.9 percent jump in the third quarter (previously down 2.1 percent). The consensus projected a 1.2 percent rise.

Compensation rose an annualized 3.7 percent after a 5.7 percent boost in the third quarter.

For the latest quarter, the upward revision to productivity largely reflected a higher estimate for output and a downward revision to hours worked. The upward revision to unit labor costs was primarily due to a higher estimate for compensation.

Year-on-year, productivity was up 0.3 percent in the fourth quarter, compared to 0.5 percent in the prior quarter. Year-ago unit labor costs were up 3.1 percent, compared to a rise of 2.0 percent in the third quarter.

Productivity gains continue but at a modest pace. And compensation costs have been growing faster than earlier believed. This combination is not conducive for stronger job growth. Again, productivity and employment need stronger output.

Consensus Outlook
NOTE: This release will contain annual revisions and consensus numbers may not be comparable.

Nonfarm business productivity growth slowed in the fourth quarter in the initial estimate despite a gain in output as hours worked rose faster. Nonfarm business productivity eased to an annualized 0.7 percent in the fourth quarter after gaining 1.9 percent in the previous quarter. The output component improved to 3.6 percent from 2.8 percent in the third quarter. However, hours worked increased an annualized 2.9 percent after a 0.9 percent gain the third quarter. In turn, unit labor costs rebounded an annualized 1.2 percent, following a 2.1 percent decrease in the third quarter. More recently, fourth quarter GDP was revised up to 3.0 percent annualized growth from the initial estimate of 2.8 percent. Because the output component of productivity uses the same source data as GDP, productivity likely will be nudged up but hours worked will also play a role.

Definition
Productivity measures the growth of labor efficiency in producing the economy's goods and services. Unit labor costs reflect the labor costs of producing each unit of output. Both are followed as indicators of future inflationary trends.  Why Investors Care
 
[Chart]
Nonfarm productivity growth has remained healthy during this expansion, but it has prevented employment from growing very fast and this hurt income growth to some extent. Unit labor costs tend to fall when productivity growth accelerates and then rises as productivity growth abates.
Data Source: Haver Analytics
 
 

2012 Release Schedule
Released On: 2/23/75/36/68/89/511/112/5
Release For: Q4(p):Q4(r):Q1(p):Q1(r):Q2(p):Q2(r):Q3(p):Q3(r):
 


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